Issue 12, November 2013

Black MondayNewsletter Citizen Action Against theft of our money without SHAME!

editorial

t a glance it is a no-brainer: A THEFT: The major country discovers oil, extracts it- Asince the world demand for oil is never-ending, starts scooping dollars, builds infrastructure, businesses start flowering, and standards of living im- prove dramatically. threat to oil benefits But wait a minute. If you take a closer look, oil-producing countries are not following identical trajecto- ries leading to prosperity – in fact there are many examples of oil lead- ing to poverty.

There is another set of factors that determine if oil will benefit any given country, like legal frameworks, com- pliance to international agreements, business environment, labour force skills, infrastructure, social stability, ap- propriate economic mechanisms, trans- parency and corruption, and others.

If you take the prime example of well-managed oil wealth, Norway, oil in itself did not lead to prosper- ity. Norway was a developed country even before they struck oil; and they had strong governance mechanisms in place before the oil started flow- ing. But then again, Norway is one of the least corrupt countries in the world.

Or let’s take . They are Africa’s leading oil producer, yet al- most half the population lives below the poverty line-in other words they are in a worse position than . Why? Because Nigeria is one of the Inside this issue >> world’s most corrupt countries. n the “Uganda Vision 2040”, the Nation- This is the ideal scenario, and one that al Planning Authority envisages a land most adult Ugandans who have slowly wit- This is the crossroads Uganda is Iof wealth and stability: 80 % of roads nessed basic social services crumble around at now. We can choose poverty or fully paved; all Ugandans living in planned them over the years, dream about. But a prosperity, but for the latter to mate- settlements, four international airports, high dream it may remain for them, if the gov- rialize, we need to install good gov- speed trains, world-class health facilities, ernment remains on its current trajectory, ernance, transparency, a legislation schools and a globally competitive agricul- where corruption, impunity and selfishness that is clear and fair, and ensure that tural sector. continue to prevail and the gap between the corruption and theft are eliminated. This modern world is seen possible be- haves and have-nots, the corrupt and in- 2 | Interview with Hon. cause the country will be earning several corrupt, selfish and selfless keeps growing Theodore Ssekikubo Yet what we have now is (weak billions of dollars from its oil every year. wider and wider. legislation, non-transparency, unfair On the face of it, it seems as simple as With the first barrel of oil for sale antici- 4 | Pictorial: Uganda at land evictions, etc) just making the that: the international oil companies extract pated sometime around 2018, the govern- the crossroads thieves richer while the rest of us suf- the crude oil, ship off some to the interna- ment seems to already be off to a very bad fer. tional markets, a fraction goes into the pro- start. 6 | NGOs working in oil posed refinery, earnings are shared accord- The recently passed laws have governance face closure In oil lies the opportunity to re-in- ing to the terms of the Production Sharing been criticized for neglecting the need for vent our social infrastructure, but let Agreements and the money earned is used parliamentary oversight in the oil and gas 7 | Injustice, confusion mar us evict the thieves first. to supplement other existing sources of rev- sector, instead providing for tight ministeri- compensation process enue to finance this grand Vision 2040. TURN TO PAGE 3 1

NOT FOR SALE Issue 12, November 2013

The bells of apprehension about the oil are already ringing Theodre Ssekikubo (Lwemiyaga County), together with Bugweri County MP Abdu Katuntu, Wilfred Niwagaba (Ndorwa East) and Gerald Karuhanga (Youth,Western) were some of the lawmakers behind the oil bribery allegations raised during a special sitting of Parliament in October 2011. Hon. Ssekikubo is currently the Chairman of the Parliamentary Forum for Oil and Gas [PFOG], a forum that continues to fight for the rights of Ugandans towards fair oil and gas benefits sharing. Below, we bring you an interview with his views about the current status, laws, institutions and what needs to be done to make it better.

What is your general feeling about the cians are bound to be compromised by the oil discovery in Uganda? appointing authority whereas the Petroleum The Oil discovery spurred a lot of hope Authority is accountable to the citizens. Well, amongst Ugandans. Given the existing chal- the law (Exploration, Development and Pro- lenges like the high levels of poverty, poor in- duction Act 2013) in its current state shows frastructure and high levels of corruption this that the Authority plays a role of advising and discovery was timely and a blessing to the being consulted but all that isn’t mandatory- people of Uganda. At the crossroads, Uganda one can choose to take the advice or leave it. needed a new beginning and direction. As a country, we have been bedeviled by the high So, is all hope lost? levels of corruption, inefficient system of Of course, all hope is not lost. We never lost governance and institutions and so the bells of the battle completely. We brought the Nation- apprehension are already ringing. Given our al Oil Company whose leadership will be ap- background and the current state of affairs, it proved by Parliament having been appointed is still a high risk to applaud the oil discov- by the minister. The petroleum Authority has ery. been brought on board despite the challenges with its powers. There are other provisions like So, do you feel that since you lost the one that ensures that our environment is fully battle over Clause 9, Uganda’s oil and protected during the exploration process. gas sector is doomed-starting with the Besides, times change, I am sure once a stable law? government comes to power, there could be We had successfully passed Clause 9 whose an opportunity to amend the Bill and give essence was to give the negotiation and li- back the powers of control to the Authority. censing powers to the Petroleum Authority instead of the minister. Our issue was that the How can you explain President Musev- minister is a political person and therefore eni’s apparent efforts and insisting to could be influenced by the powers that be. give the Minister of Energy and Mineral As you know in the past, oil exploration Development total control over the oil deals with Neptune, Heritage and other and gas sector in Uganda? companies were concluded with the minister with- out the knowledge Who is Theodore of Parliament and Ssekikubo? Ugandans in general. l Born on 20/08/1969 Politi- l Bachelor of Arts in social sci- ence and a Master in public ad- ministration and management; both from Makerere University. l Member of Parliament for Lwemiyaga County since 2001 to date. He belongs to the NRM (National Resistance Move- ment) l Member of Committee on De- fence and Internal Affairs l Chairperson Parliamentary Forum for Oil and Gas [PFOG] l One of the “rebel” MPs expelled from NRM l He worked as an assistant secre- tary/administrative officer and a lecturer

2 Issue 12, November 2013

The oil discovery was in the first place taken able Minister of Energy to think of the long stitutional court which ought to be a point of as a personal venture/business until we had a term future of Uganda. reference/arbitration that is playing politics not what is in the parliamentary session to discuss this matter. Although Uganda is a late entrant into the oil justice. petroleum act? Of course, the president influenced the entire & gas industry compared to other countries, So, from the word go, the ad-hoc committee process of passing the bill that gave powers we can build on existing knowledge of global was doomed to fail. The then Minister of In- to the minister to grant and revoke licenses of best practices. How come oil is a blessing in ternal Affairs, Hilary Onek, refused to give l The Petroleum (Exploration, oil companies. You know that on 5th February some countries and a curse in others? We shall clearance for the committee to go and make Development and Production) Act, 2012, Tullow Oil signed an agreement with continue to be vigilant. references to Dubai, Malta, Germany and the 2013, provides for the establish- Total and CNOOC at Rwakitura. The President UK where money had been transacted. To me, ment of the Petroleum Authority of called the minister to sign the agreement yet a But there have been questions about the really this shows that the President isn’t com- Uganda, whose function will be to moratorium had been put by parliament to stop parliament itself being compromised by mitted to fighting graft. monitor and regulate exploration, this. This standing order from parliament stops the Executive? development and production of the president or the minister from signing any You see, Parliament is made up of people and In your view, how can Uganda manage petroleum in Uganda. agreements without the approval of parliament they come from the same community as all its oil and gas resources to ensure lasting but you can see what is happening already. So, other Ugandans. So if there is lack of integrity benefit for all Ugandans? Do you even l The Authority shall have a Board it shows you that he is the one in charge. He has countrywide, you can expect some of them to think this is possible? of 7 directors, 3 of whom must be all the powers over the oil. All these, he does to fault. But all hope isn’t lost, we are trying It is critical that we build strong institutions women. The President appoints keep in control of the oil as we can see. our level best and some of us are doing all both on the front line and other relevant gov- the chairperson of the Board. we can to keep the interests of Ugandans at ernance institutions. The frontline institutions Please comment on the ongoing efforts the forefront. like the National Oil Company, Petroleum Au- l The Minister in charge of petro- to set up petroleum institutions like the thority should be set up immediately to moni- leum appoints the Executive Direc- National Oil Company and the Petroleum How come the report of the corruption tor and manage the entire process. Other gov- tor of the Authority whose tenure Authority. Do you think the recruitment allegations against some cabinet minis- ernance institutions like NEMA should also be is 5 years, renewable once. process will be transparent? ters, including the Prime Minister, for al- strengthened; the Albertine Graben is a very You need to first all observe that CNOOC, legedly accepting some oil bribes has not sensitive eco system. You need a functioning l The act also provides for the estab- Total and Tullow Oil are in advance stages of been tabled in Parliament? judiciary, parliament, civil service and gener- lishment of the National Oil Com- production yet the institutional framework is As you are well aware, the ad-hoc committee ally an organized country if we are to benefit pany (NOC), incorporated under not yet set up. We are currently only relying set up was supposed to report back within 45 from this natural resource. the Companies Act 2012, wholly on PEPD (Petroleum Exploration and Pro- days; but as we speak, 2 years have passed We can learn lessons from other countries owned by the State. This company duction Department) yet parliament approved and no report has been received. There was that have succeeded in this area and put them will manage Uganda’s commercial that institutions like the Oil Company and the a call for one of the ministers in question to in practice. aspects of petroleum activities as Petroleum Authority be set up to monitor the step aside but the Constitutional Court issued You can see that we are already mortgaging well as its participating interests in processes of the oil companies . an injunction stopping him from doing so. oil for other interests. This is putting politics petroleum agreements. But let me state that the people recruited into Ironically when we the “rebel” MPs were sent before the country’s interests. There is a prob- these institutions should be of high integrity out of parliament – and you know the major lem because people are trusting personalities l The President, with approval of and moral standing. They should be competent reason was because of our position on this Oil instead of institutions. As a result, we are still parliament, appoints the Board of and have Uganda at heart. Parliament owes it Bill - this very court was quick to rule against grappling with the refinery. Directors of the NOC. to the public to approve a competent team to us our stay in parliament. So, you can see the There could be hope, but we are off to a false enjoy the mandated trust of Ugandans. I call controversy here about the sort of institutions start. We need to put our house in order! on His Excellency the President and the honor- that govern our country. This is from the con- THEFT: The major threat to oil benefits have been advocating for greater transparency countries also declare the payments they African countries, generally prefer a transpar- from PAGE 1 in the oil and gas sector. Apparently, the Fo- make to host governments. The process to ent industry because it safeguards their long rum is seen as being “opposed to the NRM join EITI should at the very least have started term investment and presence in a country. al control over petroleum activities. The Min- position on oil.” by now. That way, by the time oil comes on- They are, therefore, unlikely to oppose any ister in charge of petroleum wields the power Government has also suspiciously dragged stream, clear accountability procedures would proposals from government that are aimed at to make decisions with an extraordinary influ- its feet on joining the Extractive Industries be in place to safeguard oil revenue from be- ensuring a transparent oil and gas sector. But ence over the sector including control over rel- Transparency Initiative (EITI), a global stan- ing stolen. is government willing to put all its oil and gas evant institutions, i.e. the Petroleum Authority dard, where member governments declare When it comes to the compensation of transactions in the open? Their current attitude and the National Oil Company. The minister income they earn from their extractive indus- the refinery residents in Buseruka, , suggests otherwise. can also negotiate the terms of licences and tries and the companies operating in those the process has fallen short on many fronts. But with oil, Uganda has its best shot at other agreements. Several meetings convened by different CSOs prosperity, at a life of dignity for its citizens, Plus, despite putting in place a competi- have often ended in heated arguments, with better health services and other amenities that tive bidding process for future oil blocks, representatives of residents accusing gov- can make Ugandans enjoy being Ugandans. the Upstream Act allows the minister to ernment of being unwilling to listen to their Unfortunately, in oil also, Uganda faces its accept direct bids under certain conditions. complaints. Some have even threatened to sue greatest test because it can easily take the path This leaves the process wide open to manipu- government while a few MPs have called of many African countries, like and lation and encourages corruption in the licens- for the process to be halted until all com- Nigeria, where the poor can only get poorer. ing process. plaints have been addressed. These two countries have some of the high- Meanwhile, the government has been un- But it does not need to continue est costs of living on the African continent and equivocal, with President Museveni and some like this. Uganda can actually bor- have totally ignored their agricultural sector, of his ministers publicly warning Ugandans row a leaf from other countries and where the bulk of their poverty-stricken na- not to talk about oil. harness its oil and gas resources tionals would have otherwise eked a living. A strong signal was sent when heated for the greater good. The industry The citizens thus suffer a double tragedy: debates in Parliament last year over the oil can’t thrive if the host communi- they have no source of income from their legislation eventually led to the dismissal of ties feel left out, and the formula land, and at the same time all basic commodi- three MPs from the ruling party, two of them for ensuring that the benefits are ties like salt, soap and sugar cost several times - Theodore Ssekikubo and Wilfred Niwaga- clearly trickling down to the com- more than they otherwise would. ba – vocal critics of the party and members mon man is not well defined. For once, let us get this right. of the Parliamentary Forum on Oil and Gas The international oil companies, (PFOG), a pressure group of legislators who despite their unpopular reputation in some — By Black Monday Team 3 Issue 12, November 2013 Uganda at the crossroads Issue 12, November 2013

Landdilapidated theft, lifepoor theft and suffering health centres education system is our oil safe? impassable roads With over Shs 3 trillion lost to theft so far, will the

oil discovery help Uganda advanced transport to cross over? nationwide power access

better high standards health care of living

poor living fresh and standards clean water

better education

scarcity of clean water

all-weather 4 road network advanced 5 agriculture Issue 12, November 2013

NGOs working in oil governance face closure nother minister has threatened to close communities, we shall not stop them from that have been proposed for their land, crops does not address the locals’ concerns. down NGOs working in the Albertine intervening but if they deliberately disrupt and property, and are suspicious as to why Aston Kajara’s threats follow an earlier ARegion if they continue “sabotaging” the the compensation process, then there is a law. they are being made to sign consent forms one from Internal Affairs Minister and former oil sector, in what is becoming a consistent, There is the NGO Board and Act in the Inter- showing they have been paid for their land, Commander of the Uganda People’s Defence clear signal from government on the fate of nal Affairs Ministry.” when in fact they have not. Forces (UPDF), Gen. Aronda Nyakairima, NGOs empowering people affected by oil ac- The minister was speaking at a public AFIEGO in particular has been very active who vowed to crack the whip on NGOs oper- tivities to stand up for their rights. dialogue organised by Africa Institute for En- in the Bunyoro region, educating the locals ating in oil producing areas accusing them of “We shall check in the law and get sanc- ergy Governance (AFIEGO) in last about their rights and fearlessly criticising the sabotaging oil activities. tions for those who disrespect government month in which some residents of Buseruka, government on the messy compensation pro- As the old adage goes: ‘One person’s free- including deregistration,” warned Junior Fi- who are being relocated to make way for the cess. Together with the National Association dom fighter is another person’s terrorist’ nance Minister, Aston Kajara, “If they think refinery, poked holes in the process. of Professional Environmentalists, they have there are people that are affected in these The residents are unhappy with the rates threatened to take the government to court if it What the NGO Leaders have to say

Government should stop t is deeply disturbing that since the Re- and protect the rights of citizens to engage and diverting Ugandans by settlement Action Plan process begun, gov- participate fully in the petroleum industry. It threatening and intimidating us Iernment agents such as Resident District must also be ready to account for its actions since our work is motivated by Commissioners and the Intelligence apparatus and decisions. the love for our country. have embarked on a systematic campaign of Civil Society Organizations have always harassment, intimidation and threats against strived to have a cordial working relationship Cissy Kagaba, Civil Society actors working with affected with the government without compromising Executive Director, communities. on their mandate and values. Anti- Corruption Coalition Uganda It is of course outrageous for anybody to Government must stop misrepresenting (ACCU) claim that Civil Society is sabotaging pe- Advocacy and citizen participation as Sabo- troleum development. Only people tage. seeking scape goats for their ising hostility from government is failures can utter such alle- It is unacceptable in making it difficult for Civil Society gations. Government can- a democratic society Rto freely conduct their work and this not run away from its ob- that citizens seeking is narrowing space and enjoyment of ligation to manage the oil justice from their own fundamental freedoms and rights. sector in a transparent and government should be Civil Society Organizations advocat- accountable manner, while met with threats and ing for transparency and accountability providing adequate space intimidation. in the oil sector are now targets of state for citizen participation. inspired threats and intimidation from And that is what Civil So- Joel Okao, closure and punitive bureaucratic inter- ciety demands for. Coordinator; Civil Society ferences. As Civil Society we are the It is unacceptable in Coalition on Oil and Gas, voice of the voiceless so we insist on a democratic society that Uganda (CSCO) representing the interests of the wider citizens seeking justice from community by exposing the lack of their own government should transparency happening in the oil sector be met with threats and intim- that is if all Ugandans are to benefit from idation. Government this oil. must respect Government should stop diverting Ugandans by threatening and intimidat- ing us since our work is motivated by the love for our country; and the government cannot stop us from expressing the views of the voiceless.

he on-going efforts of government and are also being intimidated by the govern- As NGOs, we are committed and the private sector - Strategic Friends ment. In addition, there is an informal di- ready to put our lives on the line TInternational (SFI) Limited through a rective by the government requiring any to ensure that the oil exploitation Resettlement Action Plan (RAP) to build NGOs interested to do work in the refin- in Uganda promotes the com- a refinery on 29.34 sq km of land by dis- ery area of Kabaale to first get permission. mon good where every citizen, placing entire villages of over 7,000 people NGOs such as AFIEGO, NAPE and others old and young, women and men, including over 3,500 women, 900 children, have been summoned and interrogated and girls and boys enjoy their constitu- 300 elderly and other vulnerable groups are warned by the security officials of the min- tional rights and are proud of their falling below the requirements of Article 26 istry of internal affairs to stop disrupting country. This, no one will stop us of the Ugandan Constitution and therefore a government programmes. This is a clear because violation on them is viola- violation. Before any payment, the affected failure by the government to appreciate tion on us. people have been denied their right to use that the NGOs’ role is to help the citizens their land for development, forced to trans- especially the poor and the downtrodden Dickens Kamugisha, fer their property, given low compensation to live a dignified life. And Yes, we need CEO, Africa Institute for Energy rates and many other challenges. development. But we cannot accept our fel- Centre (AFIEGO) AFIEGO’s Kamugisha displays a consent form that a refinery area resident The NGOs that are trying to empower low citizens’ rights to be violated under the reportedly signed confirming he had been compesated for his land. and defend the rights of the downtrodden disguise of development.

6 Issue 12, November 2013 Injustice and confusion mar the compensation process in oil refinery area

Some of the Kabale Parish residents who turned up to register their complaints about the compesation process.

hat was supposed to be be given forms to fill in to con- “How shall we be able to sur- sell to government. These forms ing that they have received pay, a smooth compensation firm that the valuation of their vive with this little compensation are distributed to each individual yet in reality the money has not Wprocess for the Uganda’s property was done fairly. There- money seriously,” Stella from by SFI, a company whose con- yet been wired to their accounts. oil refinery area has turned out after Government was supposed Nyahaira village says. Just like tract has been questioned. Sever- Geoffrey Kiwedde, Chairman of disastrous. to take them through sensitiza- her, many are stranded, uncertain al heated debates have been held the Proposed Oil Refinery Resi- And when disaster hits, the in- tion sessions on financial man- about the future when they lose both in Kampala and in Bunyoro dents Association, a local pres- nocent people - the residents who agement, followed by payments their ancestral homes. region, in which residents air out sure group, has severally posed occupy the 29 square kilometers which were meant to be effected Whereas the land valuation is their grievances to government the question of why they make in Kabaale parish in Hoima dis- in this year. worrying, the Petroleum Explo- officials, but in vain. A recent the people sign before receiving trict - are the ones who suffer the Unfortunately, the process is ration and Production Depart- meeting organized by Bunyoro any payment. He says this could consequences. half way but with a lot of gaps - ment (PEPD) is keeping a deaf kingdom and Global Rights Alert be government’s plan to cheat the The story started small and major gaps that have resulted into ear to people’s complaints. Ka- was characterized by demand ignorant populace. straight early this year. The Reset- conflicts in the area. Residents baale residents want more money for equal share of the compensa- The RAP process is supposed tlement Action Plan (RAP) drawn of Kabaale have expressed their for their land, but the body has tion monies between wives and to end by March 2014, with all by Strategic Friends International disappointment in the low valua- remained adamant and has con- husbands, something the energy the residents compensated and is a project of the Uganda Gov- tion of their land by Government. tinued to force many to append ministry has kept a deaf ear too. others re-settled. Unfortunately, ernment, implemented through They revealed that an acre of land their signatures to the forms Marital misunderstandings have few months away from the D-day Strategic Friends International was valued as low as 4.5 million that indicate their acceptance to arisen out of the natural resource, little has been achieved. Instead (SFI), a valuation/surveyor com- shillings while other property like family breakups are the order of complaints ensue often and gov- pany that was meant to sensitize crops were rated depending on Residents of Kabaale have the day in the oil region. ernment has continuously ignored and compensate or relocate all their quality and quantity. Houses expressed their disappoint- It is alleged that through their adamantly. the 7118 residents of the 13 vil- are compensated a maximum of ment in the low valuation of contractor SFI, the government The big wait for the compen- lages of Kabaale parish where the 700,000 per unit while graves, their land by Government. goes to village by village and sation money is still on. It may refinery will be constructed. cattle dips, shades and pens, val- They revealed that an acre of here they hold meetings to ensure come too late, too little or never The 29sq km on which the ley tankers, among others are as land was valued as low as Shs that people sign against the forms at all. And what shall remain of 30,000 BPD (barrels per day) re- well compensated at questionable 4.5m while other property to justify their payment. Unfor- the Kabaale parish peasants may like crops were rated depend- finery will sit, will see thousands rates. This money cannot even ing on their quality and tunately, it is not clear whether be a worse story to tell, because lose their homes and property. buy an acre in the neighbouring quantity. Houses are compen- the residents will receive the the process is already in tatters. The first step was land valuing, villages for it costs double the sated a maximum of 700,000 money or not. Their major cause after which the residents were to money. per unit. of worry is that they are confirm- — By Black Monday Team

7 BLACK MONDAY SUMMARY OF CORRUPTION SCANDALS TO LOOK BACK AT

2000 2009 2004 Compensation Police Payment 2003 Compensation to Haba Group 2003 1 Billion Training ghost to Basil GAVI soldiers 24.5 Billion Engineering 1.6 Billion 2006 20 billion 36.4 Billion 2006 Via Tri star Meant for UPE (cloth making) 20 Billion 82 Billion 2007 2006 2003 2008 Global Fund Lost through CHOGM Temangalo 600 Billion Min of Health 247 Billion 135 Billion 11 Billion 2002 Compensation to Xpectrade Ltd 2012 6.2 billion Lost in the 2009 Pension scandal NAADS Over 262 Billion Compensation 2012 2.7 Billion to Rhino Lost through breach The Shs 3.695 trillion stolen of contract by Quality Investments Chemicals Industries 14.9 Billion 46.8 Billion so far can contribute 60% 2012 2009 UMEME of the funds required to (Min of Finance) subsidy fee 400 Billion 155 Billion 2012 build Uganda’s oil refinery Compensation 2012 to Beach Side

Lost in compensation Development to Dura Cement estimated at a cost of Services Limited 1.69 Billion 37.9 Billion 2009 2012 Lost via Education NSSF Shs 6.307 trillion Ministry 2.7 Billion 375 Billion

2010 2011 2012 2013 Lost Via Meant for V Posta Kenya Internet Deal Bicycles Prime Minister 107.8 Billion 2.5 Billion 2011 2011 5 Billion 50.2 Billion Basajjabalaba Identity cards 169 Billion 205 Billion

What must we do to get our money back?

Wear only black Demand political Isolate every thief Do not buy goods clothes every action from the implicated in a or services from Monday to show you President businesses owned are tired of theft. theft scandal. Don’t invite them to your by thieves. Support burials, weddings. Ugandans working Until all the thieves have honestly to make a returned our money. living. 128 For Contact, Inquiries or Feedback on this Black Monday Movement Bulletin, write to [email protected] @BLACKMONDAY_UG National NGO Forum +256 414 510 272 - [email protected] Anti Corruption Coalition Uganda +256 414 535 660 - [email protected] ActionAid Uganda +256 414 510 258 - [email protected] DENIVA +256 414 530 575 - [email protected] HURINET-U +256414286923 - [email protected] Uganda Youth Network +256312276944 - [email protected] BLACK Monday Movement Forum for Women in Democracy (FOWODE) [email protected]/ +256414286063